Morning Bells (1 July 13)

Good Morning Friends.

God’s medicine for all problem of human is “LOVE EACH OTHER”, someone asked to GOD – If it does not work ? God smiles and answered “INCREASE THE DOSE”

After 5 days losing streak finally market recouped and gain 3% in past 2 days as Govt. played its trump card by price hike in gas prices. ONGC, RIL and OMCs control nerve of market and announcement comes in favour of all these stock which took market on ride on behalf of short covering as bear got under fear for sudden buying in energy stocks.

Finally, the Cabinet Committee on Economic Affairs has accepted the Rangarajan Committee formula for gas price revision. The price so computed will be applicable from April 1, 2014 and will be reviewed on a quarterly basis.

Market Booster –

We just discussed y’day that now Govt. is finding new way to stem fall in currency and today they come up with 2 ideas, first was CAD data and then second one and big one was price hiked in gas prices.

The Cabinet Committee for Economic Affairs (CCEA) on Thursday approved the proposal to hike the natural gas price to USD 8.4 per mmbtu (metric million British thermal units) from April 1, 2014.

The CCEA has approved the Rangarajan committee's formula for gas pricing. The new price will apply uniformly to all producers, be it state-owned firms like Oil and Natural Gas Corp ( ONGC  ) or private sector Reliance Industries.

It is believed that this action will bring new investment to country.

Gainers –

On Weekly basis - Reliance Industries (up 8.8%), ONGC (up 7.6%), HDFC (up 7.1%), TCS (up 6.7%) and Hindalco (up 6.2%) were among the major gainers.

Losers -

On weekly basis Ranbaxy Labs (down 11.5%), Tata Motors (down 2%), SBI (down 1.8%), Maruti Suzuki (down 1.1%) and Hindustan Unilever (down 0.9%) lost out shine.

Sectoral –

Domestic Front –

Petrol prices get dearer by Rs. 1.82\litre effective June 29

Oil marketing companies have hiked petrol prices by Rs. 1.82 per litre in the intervening midnight of June 28-29. The prices excludes value added tax and other levies. The hike in prices follows the steep weakening in the rupee as against the dollar and higher global crude prices. The Indian unit has been on a tear and is currently hovering around 60 per dollar.

PM Sets FY14 TG to Rs. 1.5 Tr. For PPP projects –

A meeting was held by the Prime Minister to finalise infrastructure targets for 2013-14. The meeting was attended by the Finance Minister, Deputy Chairman, Planning Commission and Ministers and Secretaries of key infrastructure Ministries, i.e., Power, Coal, Railways, Roads, Shipping and Civil Aviation.

The Deputy Chairman, Planning Commission made a presentation bringing out the performance of the six infrastructure ministries in achieving their targets in 2012-13  and the details of the targets that have been set for this year, i.e., 2013-14. These targets were set through a detailed process, first in the Planning Commission by Member (Infrastructure) and later revised through a second round of meetings in PMO. 

Global Front –

US Economy -

Globally, the US economy grew at an annual rate of 1.8% in the first quarter, well below expectations of a 2.4% annual growth rate. This laid to rest fears of an early roll-back in the Fed's bond purchase programme.

US tech firms laud Immigration Bill; step bad for Indian IT

In a landmark legislation, United States passed its much talked about immigration bill on Thursday. The legislation is historic as it will provide citizenship to 11 million people living illegally in the United States. 68 senators voted in favour of the bill which will now pass to the house of representatives where it will face last hurdle.

Fitch affirms US AAA rating –

Fitch Ratings has affirmed the United States (U.S.) Long-term foreign and local currency Issuer Default Ratings (IDRs) and Fitch-rated Treasury security ratings at 'AAA'. Fitch has also affirmed the U.S. Country Ceiling at 'AAA' and Short-term foreign currency rating at 'F1+'. The Outlook on the Long-term IDRs remains Negative.

=====================  MARKET OUTLOOK  =====================

This week all eyes will be on the June manufacturing and services PMI data. ECB meet on interest rates and unemployment data from the US and Eurozone will be tracked closely. 

Reserve Bank's policy meet on July 30, 13.

Well market started July series with big bang but I am not agree with it that its start of new bull market because when a bull market starts, it builds a base. It spends a lot of time in base building—days, weeks.

So in very short term momentum could be in the favour of bulls and opportunity seems in the Power & Energy sectors which is the main reason for 2 days rally. Keep eye on Adani enterprise & Tata Powers.

The INDIA VIX on NSE was down by 4.77% and ended at 17.95 against previous close of 18.85.

FNO PCR was 1.01 against previous close 0.89.

Indian Rupee – The rupee appreciated on the back of reform initiatives unleashed by the government after falling below the 60 per dollar mark this week.

Rupee gained 80 paisa and was trading at 59.39 against its previous close of 60.19.

S&P 500 (US) was trading at 1606.28 down 06.92 than its previous close at the time of writing M Bells.

=======================  NIFTY OUTLOOK  ========================

Nifty had good move is last 2 sessions. It has broker first hurdle of 5790-5820, now next is 5870 and for trend changer it need to close above 5935. However Nifty looks attractive on charts but range is too small i.e. either 5870 or 5935, so it comes max 100 points, if closes above 5935, momentum will change all of sudden and most probably short covering will take it for new high of for 2013.

Opening – Seems flat to positive as after 2 days big bang now participant wait for further direction.

========================  STOCK OUTLOOK  ======================

(Stock outlook needs to watch stock movement carefully and then one can bet after having a look, I tried to put related info which will help you in taking positions.)

Volats wins 250 Cr. contract –

Voltas, India's largest air conditioning company, has been awarded the Rs250-crore contract for environmental control and tunnel ventilation of Delhi's mass rapid transport system (Phase III), which had been the focus of intense competition among numerous well-known firms from India and overseas.
The order comes on the heels of Voltas' Rs350 crore Chennai Metro Rail project (now under execution), for design-and-build HVAC covering 19 stations and connecting tunnels (a distance of 24km), as well as electrical and mechanical works for seven stations.

Adani Enterprise –

In current scenario and boosted by Govt.’s action, stock seems promising.

Buy above 213 for TG 218/223 SL 198.5

One can also keep eye on Tata Power, stock has also given breakout above 88.

Indian IT –

US Immigration Bill, which was passed by US Senate last night, is seen impacting Indian IT companies' profitability if passed as a law. Analysts estimate that if the bill is passed in the current version, it could hit earnings per share of the top five firms like Infosys  , Tata Consultancy Services  , Wipro  , HCL Technologies  and Tech Mahindra   by 12-25 percent.

The Senate judiciary committee had put its version of the Bill through a test vote earlier this week. It had won with an overwhelming majority in favour of the Bill and that what again reflected in final voting last night as well with 68 to 32 (68:32) in favour of the Bill.

CG –

Shares of Crompton Greaves  closed the day at Rs 87.30, up 9 percent on reports that the company has fixed the buy-back price at Rs 125 per share.

The company will be buying back shares worth Rs 266 crore in an effort to boost the stock price which has corrected around 22 percent this year, mirroring slowdown in orders due to sluggish economy.

On Thursday, the company bagged three contracts worth Rs 232 crore from Power Grid Corporation for its Thiruvelum, Kurnool, Raipur and Wardha substations.

Aurobindo Pharma –

Aurobindo Pharma  has received tentative approval from US Food and Drug Administration to manufacture and market Efavirenz+Lamivudine+Tenofovir Disoproxil Fumarate tablets in 600mg/300mg/300mg strengths, the Hyderabad-based pharma company said on Friday.

The drug can be used alone or in combination with other antiretrovirals for the treatment of HIV-1 infection in adults and adolescents aged more than 16 years and weighing at least 40kg.

The new drug approval was reviewed under the President's emergency plan for AIDS relief, Aurobindo said. The estimated access market (emerging markets) for the product was USD 120 million last year and a strong growth is expected this year, it added.

Aurobindo Pharma now has 191 ANDA approvals from the US FDA, which include 163 final aprovals.

RCap -

Reliance Cap ropes in Nippon Life for banking licence

Reliance Capital has roped in SumitomoMitsui Trust Bank and Nippon Life Insurance for banking licence bid, said reports. Company will spin off its consumer lending business into a new entity in which Japanese giants will buy just under 5% stake each at a substantial premium, report was quoted as saying. Reliance Capital and its two Japanese partners, will apply for a licence by July 1, the deadline set by the RBI.

Today’s sign - Buy above 344 TG 351/359 SL 340.5

New Banking Licence -

The race for the banking licence toughened up after a number of national players from private sector NBFC space and otherwise entered announced their entry on the banking licence bandwagon.

But who will reach the finish line remains the big question. Reserve Bank of India would receive applications for new bank licence on July 1, 2013

M&M Financial Services, the NBFC arm of the Mahindra & Mahindra Group which was considered a serious player in many quarters unexpectedly chose the exit route citing inadequate transition time.

==================== OPEN CALLS ====================

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

# Be with strict SL and don’t hesitate to book even small profit if Nifty doesn’t shows strength.

=============== INVESTMENT BASKET ===============

(Stock in this section is with view of 3 months to 1 year)

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog Fronm Jan 13 to April 13 (Total 58,800)

Since most of you haven’t entered CG, GAIL & BOI Calls, I am not considering it under Blog PL while trio made approx 25K profit in past 3 days.

Billionaire Club from Jan 13 to June 13 (Total 1,25,600)

Today’s MG Mantra –

July series seems tricky, sell and go was for May which came in June. Still both were relief rally and not investment in market. So pressure would remain intact, here onward I am expecting range bound session, go with flip (sell & buy in different stocks) positions, I am sure you will make life’s remarkable profit in this series.

Have a Profitable day – MG

Disclaimer –

1. I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade or consult your financial advisor.

2. Those that don’t have patience and are not willing to book loss also in cases don’t enter this market.